Offer Issues

Cases

McCambridge -v- Brennan Bakeries Ltd

[2013] IEHC 569

 

Kelly J

 

This Application

17. The defendant seeks an order pursuant to O. 22, r. 1 of the Rules of the Superior Courts granting it leave to pay into court a sum in satisfaction of the plaintiff’s claim. The application is resisted.

The Rule

18. Order 22, rule 1 confers a right on a defendant who is sued for a debt or damages or in an admiralty action at any time after he has entered an appearance in the action and before it is set down for trial, upon notice to the plaintiff, to pay into court a sum of money in satisfaction of the claim. Even if the action is set down for trial, a lodgment may be made in such a case with leave of the court. Clearly, leave of the court is required in the instant case since the action is long set down for trial.

 

19. Two lines of argument are propounded by the plaintiff in objecting to this application. First, it says that on the plain wording of the rule the entitlement to make a lodgment is limited to an action for a debt or damages or an admiralty action. A claim for an account of profits is not a claim for a debt or damages.

 

20. Second, the plaintiff argues that the concept of a lodgment is premised on the assumption that a claimant should have a reasonable idea as to the true extent of its loss and thus be able to make a decision as to whether it will continue to pursue a claim for damages when faced with a proffered sum chosen by the defendant. The lodgment procedure is wholly unsuited for use where the remedy of an account of profits, which is concerned with what the defendant gained from its unlawful activity as opposed to what the plaintiff lost, is claimed. The taking of the account seeks to identify the sum which the defendant is obliged to disgorge. In advance of that process concluding and that sum being identified, it is said that it would be unjust to pressurise the wronged party, whilst still unaware of the true financial position, into abandoning its claim for fear that the account might ultimately yield less than the figure lodged.

Interpretation of the Rule

21. On the meaning of the rule, the plaintiff cites a number of judicial dicta in support of its contention that a lodgment is not permitted.

 

22. The oldest of these authorities is Nichols v. Evens, a case decided in 1883 (22 Ch. D 611). In that case, Fry J. had to deal with the provisions of Order XXX, rule 1 of the then Rules of Court which provided:-

 

“Where any action is brought to recover a debt or damages, any defendant may at any time after service of the writ, and before or at the time of delivering his defence, or by leave of the court or a judge at any later time, pay into court a sum of money by way of satisfaction or amends.”

23. There that judge said at p. 613:

“In their statement of defence the defendants say that the money is paid into court to cover the plaintiff’s particular demands in respect of her share of the capital money and in respect of her share of the £200. They do not say that they have paid it into court in satisfaction of her entire demand, nor could they do so, for the plaintiff was asking an account on the footing of wilful default, and it was not possible to satisfy this demand by any specific payment. I am of opinion that Order XXX does not apply to this case. In my judgment that order applies, as is shewn by rule 1, only to a case in which the case is strictly speaking to recover a debt or damages, where the whole demand applies to money. If the plaintiff seeks an account it is impossible to satisfy that demand by any specific payment of monies.” (My emphasis)

24. A more recent decision cited by the plaintiff is that of Blayney J. in O’Neill v.[1992] 1 I.R. 160. That is a case in which the court was asked to consolidate two sets of proceedings. One was a petition brought under s. 205 of the Companies Act and the other an action instituted by the same petitioner by way of plenary summons claiming damages.
25. The judge took the view that consolidation of the two actions was not possible because the proceedings did not lend themselves to be converted into a single proceeding. As part of the application, the defendant sought to meet both proceedings with a single lodgment. That was also refused with Blayney J. saying:-

 

“Once the proceedings remain separate, there clearly cannot be a single lodgment in respect of both. Apart from this, while I accept Mr. Kelly’s submission that the company proceedings come within the definition in the rules of an action, I do not agree that they constitute an action for damages within O.22, r.1 so as to make it possible for a respondent to make a lodgment. While there appears to be an indirect claim for damages in the petition, such damages could not be damages at common law and in my opinion it is to such damages that the rule refers.” (My emphasis)

26. The third and most recent case relied upon by the plaintiff is the decision of Geoghegan J. in Larkin v. Whitony Limited (Unreported, Supreme Court, 19th June, 2002). There Geoghegan J. said of O. 22, r. 1:-

“But that rule which has also existed for a great number of years only applies to an action for debt or damages. It does not apply to a specific performance suit. It is true that there was an alternative claim for damages but it is quite clear that the intended payment into court in this case does not in any way relate to the alternative claim for damages. It relates to the balance of the payment which would allegedly have the effect of rescinding the contract being sued upon.”

These cases show, it is submitted, that the rule, as judicially interpreted, does not permit of a lodgment, save in an action for debt or common law damages. It does not permit a lodgment in a claim for an account of profits, it is said.

Nature of Relief

27. Apart from those three cases, the plaintiff also says that the concept of a lodgment is alien to a claim for an account of profits because of the very nature of such relief.

 

28. In House of Spring Gardens v. Point Blank Limited & Ors [1984] I.R. 611, Costello J. in this court described the remedy sought here in the following way:-

 

“An order for an account of profits and their payment is an equitable remedy, given in lieu of an order for the payment of damages…. an order for the payment of profits [can] be made against all persons who have been involved in the same tortious act of copyright infringement.”

29. The nature of the remedy was also considered in Hollister Incorporated & Anor v. Medik Ostomy Supplies Limited [2013] IP&T 577 where Kitchin L.J. said at p. 598:-

“…an account of profits does not compensate the trade mark owner for the losses he has suffered. It simply deprives the infringer of the profits he has made from an activity in which he should never have engaged. It therefore ensures the infringer does not benefit from his wrong, but it contains no element of punishment. Moreover, as an equitable remedy, it may be refused if for any reason it would produce an unjust result…. As for effectiveness, an account is an effective deterrent because an infringer knows he will not retain any profits derived from his infringement.”

30. In House of Spring Gardens on appeal, Griffin J. considered the question of damages as contrasted with an account of profits and the nature of the latter. He said at 706:-

“The defendants claim that the sum of approximately £630,000 payable to the plaintiffs under the royalty agreement would be adequate compensation for the headstart the defendants obtained. The plaintiffs, however, claim that such sum would be totally inadequate, as the defendants had more information than was available in the public domain, and that where profit is made by pirating the art of another, the person making the profit should not be allowed to keep his ill-gotten gains. They claimed that the plaintiffs are entitled at their option to damages or to an account of profits in lieu of damages. That this is so is clear from the authorities. In Peter Pan Manufacturing v. Corsets Silhouette Ltd. 23 [1964] 1 W.L.R. 96. [1964] 1 W.L.R. 96, Pennycuick J. said at p. 106:-

 

‘. . . it follows as a matter of right that the plaintiffs are entitled at their option to claim damages in respect of such invasion of their rights as has already taken place, or alternatively, an account of the profits made by manufacture and sale of [the goods] in invasion of their rights.’

 

And at p. 108 he said:-

 

‘. . . what the plaintiff who elects in favour of an account of profits is entitled to, is simply an account of profits in the sense which I have indicated, that is: What has the plaintiff expended on manufacturing his goods? What is the price which he has received on their sale? and the difference is profit.’

 

The basis on which such an account of profits should be ordered is that there should not be unjust enrichment on the part of the wrongdoer. In My Kinda Town Ltd. v. Soll 36 [1983] R.P.C. 15. [1983] R.P.C. 15, Slade J. said at p. 49:—

 

‘As I understand the relevant principles, the object of ordering an account in cases such as the present is to deprive the Defendants of the profits which they have improperly made by wrongful acts committed in breach of the Plaintiffs’ rights and to transfer such profits to the Plaintiffs.’

 

And at p. 54 he said:—

 

‘Thus, in my judgment, the six authorities relied on by the plaintiffs afford authority for the proposition that, in ordering an account of profits in a passing-off case or a case involving breach of confidence, the Court will ordinarily direct the account in a form wide enough to include all profits made by the defendant from his tortious acts of breaches of confidence.’

 

And at p. 55:—

 

‘The purpose of ordering an account of profits in favour of a successful plaintiff in a passing-off case is not to inflict punishment on the defendant. It is to prevent an unjust enrichment of the defendant by compelling him to surrender those profits, or those parts of the profits, actually made by him which were improperly made and nothing beyond this.’”

31. In these circumstances, it is said that the very nature of a claim for an account of profits is one which does not lend itself to the possibility of a lodgment. The account will require the defendant to disgorge all profits made from the wrongful activity.
32. In a claim for damages, the plaintiff knows the amount of loss sustained by it and thus can make an informed decision as to whether to accept a lodgment or not. But the plaintiff will not know the amount of profit that has been made by the wrongdoing defendant in advance of the taking of the account and so ought not to be put to the hazard by permitting a defendant to make a lodgment in such circumstances. Thus, it is said that O. 22 makes perfect sense in excluding an ability on the part of a defendant to make a lodgment in an account of profits case.

The Defendant’s First Argument

33. The defendant’s first argument sought to persuade me that a claim for an account of profits was accommodated by the provisions of O. 22, r. 1 because such a claim could truly be regarded as an action for damages. This argument was largely based upon passages from Chapter 1 of the latest edition of McGregor on Damages dealing with the definition of the term damages.

 

34. At para. 1-001 of the work, the following is to be found:-

 

“A resounding definition of the term damages would make for a fitting opening of a work on the law of damages and in their first sentence earlier editions have done just this. But it has become more and more difficult, as time has moved on, to construct a definition of damages which is satisfactory and which is comprehensive. So many exceptions to, and qualification upon, once solid, clear, unadulterated rules have appeared, perfectly sensibly, that a clear-cut definition is no longer feasible; the arrival of restitutionary damages and of human rights was the last straw. The impossible search for a clear-cut, comprehensive definition is therefore abandoned. Instead the definition from earlier editions, a definition which still represents the norm, is taken but it is qualified to indicate that it applies generally but not invariably, thus:

 

Damages in the vast majority of cases are the pecuniary compensation obtainable by success in an action, for a wrong which is either a tort or a breach of contract, the compensation being in the form of a lump sum awarded at one time, unconditionally and in sterling.”

35. This passage, it is said, demonstrates that the notion of damages is now much wider than heretofore and certainly much wider than was the case when the current 1986 edition of the Rules of the Superior Courts was promulgated. A fortiori, it is a much wider concept than it was in 1883 when Fry J. decided Nichols v. Evens.
36. What must be borne in mind, however, is that when Nichols v. Evens was decided the equitable remedy of a claim for an account of profits existed. That is clear even from the text of Fry J’s judgment.

 

37. The argument proceeded to para. 1-002 of McGregor. There, four recognised types of damages are identified. The only one that is of relevance from the point of view of this case is category No. 4 namely, restitutionary damages. The author says of them:-

 

“Restitutionary damages are new on the scene. They come into play when the defendant’s tort or breach of contract has given him a benefit and the claimant has suffered no loss or at least has suffered a loss of smaller proportions than the benefit to the defendant. Such an award is the antithesis of compensation.”

38. Fortification for the argument was said to be found in paras. 1-006 and 1-007 of the same work. They read as follows:-

“Actions claiming money and restitution, in earlier days called, confusingly, quasi contract, do not depend upon a wrong done to the claimant. Their very existence indeed is attributable to the fact that no wrong, whether tort or breach of contract, is generally available upon which the claimant may sue. Illustrations are provided by actions for money paid under a mistake of fact, actions for money paid under a contract which is in some way vitiated and actions to recover money paid to a third party for which the defendant is primarily liable. Such claims depend not upon a loss to the claimant but upon a benefit to the defendants; they do not fall within the ambit of a textbook on damages.

There are, however, situations in which a restitutionary claim is available where there is tort or breach of contract in addition. In most of such cases this will be because there is a benefit to the defendant wrongdoer as well as an equivalent, or a greater, loss to the claimant. Claims may then be brought by him either for restitution or for damages; they are simply in the alternative. But where the incidence of loss falls below the level of benefit or where there is no loss at all, the modern philosophy is that suit must be brought for restitutionary claims. The thinking is not clear as to whether this is a claim in restitution or in damages. If it is to be restitution, one has a situation where a tort or breach of contract gives rise not to a damages claim but a restitution claim. If it is to be damages, the tort or breach of contract is there but the criterion for recovery is not compensation but benefit.”

 

39. These paragraphs were cited in an effort to persuade me that an account of profits can be regarded as in some way a claim for restitutionary damages. Even a cursory reading of the passages cited can demonstrate likely defects in that argument. But the argument is torpedoed by the very next passage from the book.
40. In para. 1-008, one finds:-

 

“Actions claiming money in equity under equity’s exclusive jurisdiction are not actions for damages. The principal tool in equity for awarding money is the action for an account which is clearly not for damages, but even actions which do not involve the handing over of profits gained by the defendant are not strictly actions for damages; they are claims for equitable compensation.”

41. Thus, I have no difficulty in concluding that a claim for an account of profits is not an action for damages and cannot be so regarded for the purposes of Order 22, rule 1.

The Defendant’s Second Argument

42. The next line of argument was by reference to a number of judicial dicta, the majority of which were made in the context of applications seeking extensions of time in respect of lodgments.

 

43. The first of these was Ely v. Dargan [1967] I.R. 89. This was a case on its facts very far from the present. The plaintiff claimed damages for personal injuries. £7,000 was paid into court by the defendant with his defence. The plaintiff was awarded £13,000 damages. The Supreme Court set aside the award as being excessive and directed a new trial. It ordered the plaintiff to pay the defendant his costs of the appeal and also ordered that the costs of the trial should abide the result of the new trial. Subsequently, the infant plaintiff’s claim was compromised subject to the approval of the High Court. That approval was not forthcoming. The defendant then applied to the High Court for liberty to increase the amount of money that had been paid into court. That approval was refused except on terms which were not acceptable to the defendant, who appealed to the Supreme Court against the refusal. The decision of the High Court was affirmed. In the course of his judgment, Ó Dálaigh C.J. said of O. 22, r. 1, as follows:-

 

“The rule is in the widest terms, and it clearly allows of an application being made to the Court before a retrial as well as before a trial. The only question, in the former case, is what conditions the Court may properly impose in granting leave. The general principle underlying the lodgment machinery of the Courts is that a plaintiff, who accepts within the required time a lodgment in satisfaction of his claim, is entitled to have the costs he has incurred to the date of lodgment taxed and paid by the defendant: r. 4 (3) of Order 22. The plaintiff can suffer no disadvantage unless he chooses to go to trial and fails to obtain an award of more than the amount lodged: r. 6 of Order 22. The disadvantages for a plaintiff in the latter circumstances are those enumerated in r. 6, and those disadvantages are the correlatives of the considerable advantages which the defendant reaps….

The defendant was right to urge that the public interest is served by allowing a defendant, even at the eleventh hour, to proffer to the plaintiff under the lodgment machinery of the Courts a sum that the defendant considers adequately meets the plaintiff’s claim.”

 

44. The next case cited was a decision of Peart J. in Window & Roofing Concepts Limited v. Tolmac Construction Limited [2004] ILRM 554. The issue in that case was not a late lodgment but rather a late acceptance of a lodgment already made. The extension of time had been refused by the Master of this Court and Peart J. dealt with the appeal from that decision. In the course of his judgment, he said:-

“In considering whether the court should exercise its discretion by granting an extension of time for the acceptance of a lodgment in this case, the court must look beyond the commercial interests of the parties, and consider the wider purpose of the lodgment procedure. A public interest is served by allowing a defendant to lodge a sum of money in Court which he believes is sufficient to satisfy a plaintiffs claim. That public interest was referred to by O’Dalaigh C.J. in Ely v. Dargan (1967) I.R. 89 at 95, albeit in the context of an application by a defendant for liberty to make a late lodgment, rather than in the context of an application for an extension of time to accept a lodgment. But the principle remains the same in my view.”

 

45. Later the judge said:-

“This concept of the public interest has been regarded, in subsequent cases, as important in relation to applications to the court for leave to make a late lodgment. It is of equal importance in the present application since the same interest is at stake, namely the interest of avoiding unnecessary costs, and ensuring that as far as possible valuable court time is not wasted by hearing cases which do not need to be heard.”

46. Finally, at p. 559 he said:-

“The public interest is an important consideration in the lodgment procedure. I have always believed that the Rules of the Superior Courts should, as far as possible, be construed so as to enable things to be done, rather than to prevent things from being done. They are a framework within which litigation is to be conducted, and they are an enabling set of rules rather than a disabling set of rules.”

47. Peart J. returned to this topic four days later when he decided Kearney & Anor v. Barrett & Ors [2004] 1 IR 1. There he said:-

“Can it seriously be suggested that from the court’s perspective as opposed to the plaintiffs’ that it is wrong or unjust or unfair that a defendant should be permitted to make, within the time permitted by the Rules of the Superior Courts 1986, a lodgement or tender offer in the light of the true facts of the case, including the weakness in his opponent’s case? I think not. The purpose of the lodgment procedure is to facilitate an earlier settlement of a case, as well as reducing the costs of the action and helping to ensure that as far as possible cases do not get heard by a court which need not be heard.”

48. These cases were cited with a view to demonstrating that a broad interpretation should be given to the relevant rule of court and that in the public interest it should be interpreted so as to facilitate the making of a lodgment even in a case which clearly is not encompassed in the rule.
49. Alternatively, if the interpretation of the rule cannot be so stretched, then the Court, under its inherent jurisdiction, should permit of such a lodgment.

 

50. In support of this approach, heavy reliance was placed upon the observations of Geoghegan J. in Dome Telecom v. Eircom Ltd. [2008] 2 IR 726.

 

51. In that case, he rejected any idea that the right to discovery of documents should be exclusively based on an interpretation (literal or otherwise) of the relevant rule of court. He went on to say:

 

“In modern times, courts are not necessarily hide bound by interpretation of a particular rule of court. More general concepts of ensuring fair procedures and efficient case management are frequently overriding considerations. The rules of court are important and adherence to them is important but if an obvious problem of fair procedures or efficient case management arises in proceedings, the court, if there is no rule in existence precisely covering the situation, has an inherent power to fashion its own procedure, and even if there was a rule applicable, the court is not necessarily hide bound by it.”

52. Reliance was also placed upon my own judgment in P.J. Carroll & Co. Ltd. v. Minister for Health (No. 2) [2005] 3 IR 457, where I said:

“There is a jurisdiction inherent in the court which enables it to exercise control over process by regulating its proceedings, by preventing the abuse of process and by compelling the observance of process. It is a residual source of power which the court may draw upon as necessary wherever it is just or equitable to do so.”

53. There is no doubt but that there is a jurisdiction inherent in the court such as was described by Geoghegan J. and myself in the passages just cited. It is said that a lodgment should be permitted in this case because pace Peart J. it is in the public interest that such be allowed so as to facilitate settlement in the case as well as reducing the costs of the action.
54. It is also said that in a case which is being dealt with in the Commercial List, which has as its object the just but expeditious and cost effective trial of a case, it is all the more necessary that such a procedure be permitted.

 

55. The court is master of its procedures and is, as Geoghegan J. observed, not necessarily hide bound by the interpretation of a particular rule of court. Indeed if, as he says, there is no rule in existence precisely covering a given situation the court has an inherent power to fashion its own procedure. Even if there is a rule applicable the court is not necessarily bound by it. It is, however, important to draw attention to the fact that, as is clear from the quotation from his judgment, such an approach by the court is only permissible if there is an obvious problem of fair procedures or efficient case management.

 

56. I have no difficulty in accepting the general approach outlined by Peart J. on the question of construction of the Rules of the Superior Courts. It is permissible to regard the rules as a framework within which litigation is to be conducted and to construe them as an enabling set of rules rather than the opposite.

 

57. In my view, however, those approaches are of no assistance to the defendant in the present case. I am fully in favour of the use of procedures which may bring about an early, expeditious and cost effective resolution of litigation. But such procedures must not put justice to the hazard.

 

58. I do not perceive anything unfair in not permitting a defendant to pay money into court whether under O. 22, r. 1 or any analogous court devised procedure in a case such as this.

 

59. On the contrary, I take the view that the observations of Fry J. in 1883 are as apposite now as they were then. He said:-

 

“If the plaintiff seeks an account it is impossible to satisfy that demand by any specific payment of monies”

60. As is clear from the various quotations to which I have referred in the course of this judgment, the taking of an account of profits is not to be equated with a claim for damages. The account is taken in circumstances where the defendant is going to be required to disgorge profits made by it in the course of unlawful activity. The claimant in such a case is not to be treated as somebody suing for damages who knows the extent of their damage and so can make an informed decision on whether or not to accept a lodgment. A claimant in an account of profits is in an entirely different position. It would not be just to put such a person to the hazard by permitting a defendant to make a lodgment with the consequences in costs should the account yield a lesser sum than that lodged.

Conclusions

61. I conclude that a lodgment is not permitted under O. 22, r. 1 regardless of how wide an interpretation is given to the rule. Neither is this a case where the interests of justice require the court to devise a procedure analogous to that prescribed in Order 22, rule 1. On the contrary it would be unjust to create such a hazard for the plaintiff. In these circumstances, I answer the first question posed at para. 1 of this judgment in the negative. The second question does not arise.

 

62. The application is refused.

 

 

O’Neill (a minor) -v- National Maternity Hospital Hospital

[2015] IEHC 160  Barton J

 

The law.

28. It seems to me to follow from the submissions made on behalf of both parties on this application that the first point of departure which the court has to consider goes to jurisdiction, specifically, whether or not it is open to the court to accept or reject what the defendant says is a firm offer in respect of the plaintiff’s claim but which the plaintiffs have categorised as nothing more than a proposal to engage in a different process for the assessment of the plaintiff’s damages.

 

29. Order 22. Rule 10 of the Rules of the Superior Courts provides :

 

“In any cause or matter in which money or damages is or are claimed by or on behalf of an infant or a person of unsound mind suing either alone or in conjunction with other parties, no settlement or compromise or payment or acceptance of money paid into court, either before or at or after trial, shall, as regards the claims of any such infant or person of unsound mind, be valid without the approval of the court.”

30. A number of requirements must be satisfied in order to constitute a valid compromise or settlement and these may be summarised as follows:

(a) There is in existence a dispute between the parties to the litigation,

(b) That the parties to the litigation have reached an agreement to compromise the issues in dispute between them,

 

(c) That there is consideration for the compromise,

 

(d) That there is an intention to create legal relations; and

 

(e) That the agreement between the parties is certain and complete.

 

31. It is also open to the parties to reach a partial compromise or settlement of the issues between them and to allow the balance of the claim to proceed to trial.
32. Whether it be a complete or partial compromise of proceedings, no settlement or compromise of proceedings involving an infant or person of unsound mind is valid in law without the approval of the court. See Carey v. W. H. Ryan Limited [1982] I.R. 179.

 

33. Similarly, no payment or acceptance of money paid into court or offered or offers of payment in lieu of lodgement provided for by O.22 r.14, nor any assessment by the Injuries Board is valid without the court’s approval.

 

34. Reference was made in the course of submissions to s.63 of the Civil Liability Act 1961. That section it is confined by its wording to cases where money has been paid into court. It is also clear from the provisions of O.22 r.14 that the provisions in relation to approval of a lodgement in that Order apply mutatis mutandis to tender offers.

 

35. Although the word “offer” is not mentioned in the Order, whether it is in the form of a tender, or a lodgement, or made by letter in writing or communicated orally in respect of the plaintiff’s claim or any part of the plaintiff’s claim, the purpose of an offer is to compromise or settle the claim in respect of which it is made. It is quite clear from O.22 r.10 (1) and its ancillary rules, that where there is a payment of money in proceedings involving an infant or a person of unsound mind, that any payment must be approved by the court. Payment in this context means payment of a sum of money whether by way of general and/or special damages in respect of any cause of action.

 

36. It follows that where the claim is to one for damages only, whether general or special or both, the settlement or compromise of any such action involving an infant or person of unsound mind not so found will invariably involve the payment of money and so comes within the Order. Similarly, where proceedings are for relief other than damages, any settlement or compromise of such proceedings involving a person of unsound mind or an infant also comes within the ambit of O.22 r.10. Accordingly , an offer within the meaning of Order 22 rule 10 means an offer the effect of which is to settle or compromise proceedings or a claim in proceedings

 

37. With regard to the exercise of the jurisdiction by the court on an application to approve the acceptance or rejection of a lodgement, tender, offer, or Injuries Board assessment in actions coming within the meaning of O.22 r.10 and s.63 of the Civil Liability Act 1961 as amended, that is to be exercised and the determination made solely by the judge entertaining the application. In exercising that jurisdiction whilst the wishes of the next friend and/or the recommendations of counsel are matters to be taken into account by the court it is not bound by them. See Bourke v. CIE (S.C.) [1967] I.R. 319.

 

38. The proposal before the court is not in my view an offer to settle or compromise the matters remaining in issue by way of money payment in the same way that the plaintiff and the defendant have, subject to the approval of the court, agreed to settle other heads of claim in this case. As the remedy in law which is being sought by the plaintiff in respect of those matters is one of damages, the defendant’s proposal does not satisfy the requirements to constitute a valid settlement or compromise of the plaintiffs claim, accordingly, it does not come within the meaning of O.22 r.10.

 

39. The defendant does not contend, however, that it is upon that order that the court should proceed to determine whether or not to accede to the defendants application but rather that it should do so on the basis that for all practical purposes it is in effect exercising its jurisdiction in wardship. Whilst quite properly it is accepted by the defendant that the advices of counsel and the wishes of the parents and, in particular, the next friend, are matters properly to be taken into account the court is, nevertheless, bound to resolve the matter on the basis of what is in the best interests of the plaintiff.

 

40. The jurisdiction in wardship under the Lunacy Regulation (Ireland) Act 1871 was ultimately transferred to the President of the High Court by s.9 (1) of the Courts of Justice Act 1936.

 

41. Reference was made in the course of submissions to the ruling of the court delivered by me in the case of Corroon (a minor) and Pillay’s General Hospital Limited and others delivered on the 29th October, 2014. In that case there were a number of interim settlements which had been approved by the court and on foot of which the plaintiff had been made a ward. When the case came before me the plaintiff had attained his majority and I directed that a ruling be sought from the President as to the effect that this had had, if any, on the plaintiff’s status as a ward. The President decided that having regard to the fact that the plaintiff had been brought into wardship only by virtue of his minority , that the wardship had been discharged when he attained his majority ,and so the matter came back before me. As with the plaintiff in these proceedings, the plaintiff in that case had sustained catastrophic injuries. He and his next friend wished to have damages assessed once and for all on a lump sum basis. The defendant made an application at the close of the opening and sought to have the assessment of damages proceed on a periodic payment basis. Upon enquiry as to the capacity of the plaintiff to give instructions, an application was made to amend the title of the proceedings to enable the plaintiff to proceed by his next friend as a person of unsound mind not so found. In the event and having heard evidence from the plaintiff’s mother and next friend and having taken into consideration the submissions of counsel and the views of the next friend in evidence, the court decided that it was in the best interests of the plaintiff for the matter to proceed by way of an interim assessment of damages and periodic payments.

 

42. Although counsel for the defendant in this case submitted that the jurisdiction being exercised in that case was, in essence, one in wardship, I did not consider myself to be doing so, such jurisdiction being vested in the President, but rather to be exercising an inherent jurisdiction which required the court to approach the determination of the matter on the basis of what was in the plaintiffs best interest. In that case there was no issue between the parties as to the nature of the jurisdiction being exercised.

 

43. If, by virtue of the fact that the plaintiff in that case was proceeding as a person of unsound mind not so found and in circumstances where it had been indicated to the court that an application was to be made to bring the plaintiff into wardship, the court was exercising a wardship jurisdiction, as is submitted by counsel for the defendant, that is plainly not the case here. The plaintiff is not a person of unsound mind not so found but, rather, is an infant at law and proceeds accordingly. Artificial though the distinction may be, as counsel for the defendant submitted, the plaintiff is not a ward. She is a minor. This is an action between the infant plaintiff and the defendant. Absent the defendant’s application coming within the meaning of O.22 rule 10 it is the inherent jurisdiction and not that in wardship which the court is exercising in the determination of the matter now before it.

 

44. The defendant also invoked the provisions of O.36 r.34 as enabling the court to make an order directing the assessment of damages for a ten year period or thereabouts, adjourning the balance of the action for determination to that time.

 

45. Order 36 rule 34 provides

 

“The judge may, if he thinks it expedient for the interests of justice, postpone or adjourn a trial for such a time, and upon such terms, if any, as he shall think fit.”

46. A not dissimilar application was made on foot of the Order and which fell to be considered by the high court in the case of Russell v. Health Service Executive [2014] IEHC 590. In that case there had been a previous periodic payment settlement which had been approved by the President of the High Court on the 2nd of October 2012. It was a term of the settlement that the matter would be listed in October 2014 and that if legalisation establishing periodic payment orders had been enacted in the meantime the plaintiffs future needs would be dealt with by way of periodic payments. However, it was also agreed that if legislation had not come into effect when the case came on for hearing then, in default of agreement between the parties as to the terms of any settlement, the plaintiff would be entitled to proceed with the balance of his claim not already provided for by the payment of the initial lump sum on an agreed basis of 100% of the claim.
47. When the matter came before the court the defendant submitted that, notwithstanding the terms of the previous settlement, the matter should proceed on the basis of a periodic payment order rather than on the basis of an assessment according to the provisions of the Civil Liability Act 1961 as this was in the best interests of both the plaintiff and of justice.

 

48. That submission was rejected. Cross J. held that :

 

“The plaintiff through his next friend is entitled to proceed to have his case assessed in its finality in accordance with the law as it stands. Even in the absence of an express agreement and settlement that the plaintiff is so entitled to proceed, I believe that exceptional and almost unimaginable factors would have to ensue to prevent a plaintiff, who is well advised by solicitor and counsel, to have his case determined in accordance with the law.”

49. This decision is cited as authority to support the case made by the plaintiff in response to the within application.
50. The Plaintiff also relies on the decision of the Supreme Court in North Western Health Board v. W. (H) [2001] IESC 9 delivered on the 8th November, 2001. It was submitted that although that case concerned matters which were very different from those under consideration here, it is of some assistance to the court in the context of an exercise by the court of its inherent jurisdiction rather than upon any specific jurisdiction conferred by statute or under the rules of court, including wardship. It was submitted that particular regard has to be paid to the fact that under the Constitution the State recognises the family as the natural primary and fundamental unit in society possessing rights superior to positive law; that a child has constitutional rights both as part of the unit of the family and as an individual, that there is a presumption that the welfare of a child is to be found within the family, that parents have the primary responsibility for a child’s welfare and that the Constitution relegated, in those circumstances, the State to a subordinate and subsidiary role. The involvement of the State in a way which had the effect of supplanting constitutional rights of the child and the parent as a family unit could only arise in the most exceptional circumstances.

 

51. In that case the child was not a party to the proceedings but rather those proceedings involved the plaintiff seeking a declaration and order of the court that a medical test should be carried out on a child whose parents, the defendants, had refused their consent to that procedure.

 

52. The factual matrix of that case is altogether different to that which the court is required to consider here. In this case the plaintiff is a litigant who brings these proceedings by his mother and next friend.

 

53. It is apparent from the judgments in that case that the position which was being considered in terms of the exercise by the court of its inherent jurisdiction was that which related to the power and duty of the State in a role which was clearly subsidiary to that of the parents.

 

54. In this case the role of the court, when its inherent jurisdiction is involved in the making of a decision on the matter before it, cannot be compared to the role of the State in circumstances where, as in that case, the plaintiff was seeking to intervene in what was in effect the exercise of constitutional rights clearly conferred on the family; the judgement of the court has to be seen and understood in that context.

 

55. It is clear from the judgments in that case, however, that the Supreme Court expressed a particularly strong view as to the rights of parents in what was described as the constitutional family carrying with it a presumption as Hardiman J. put it

 

“…that where (it) exists and is discharging its functions as such and the parents have not for physical or moral reasons failed in their duty towards their children, their decision should not be overridden by the State or in particular by the courts in the absence of a jurisdiction conferred by statute.”

56. It was fairly accepted by counsel for the plaintiff that the facts of that case were not at all similar to the facts in this case, however, it was submitted that in this case there could be no doubt but that the parents were thoughtful, caring and intelligent people devoted to their children and that given the constitutional position of the family weight had to be given by the court to the wishes of the parents such that those wishes could only be displaced in circumstances which were both clear and exceptional but none of which, it was submitted, were present here. In fact there was nothing to suggest otherwise that the plaintiff’s parents were acting and motivated only by what was in the best interests of their child.
57. It was submitted that even if the court were of the view that a different decision might be better for the plaintiff than that which her parents take, it is not the function of the court nor is it permissible for the court to substitute its own decision for that of the parents in the absence of compelling and exceptional circumstances.

 

58. It was said on behalf of the plaintiff that whilst O.36 r.34 enables the court to adjourn or postpone the trial, it was not contemplated at the time when that rule was promulgated that the court would adjourn a trial to make provision for periodic payments nor for periods which would possibly be involved including as in this case a period of up to ten or eleven years. The process of the court in assessing damages on a periodic payment and structured settlement basis, whilst the subject matter of academic debate, had not then been and still remains to be legislated for. The most recently expressed intention of the government to do so whilst welcome cannot be taken into account by the court in determining the matter now before it. Moreover, it was submitted that the court cannot be given and has not acquired a jurisdiction arising out of what has been described as an ad hoc process to make the kind of orders now sought by the defendant.

 

59. Insofar as there is an inherent jurisdiction in the court enabling it to entertain an application such as the present, it was submitted on behalf of the plaintiff that that is to be exercised sparingly and only in the most exceptional circumstances.

Conclusion.

60. That the court has made periodic payment orders in previous cases and, indeed, has adjourned the trial of cases, sometimes for years, such as in Corroon where the plaintiff had also sought a final assessment of damages in accordance with the law as it now stands, could all be said to be examples of an exercise by the court of the jurisdiction conferred on it under O.36 r.34. However, such orders have generally been made in the context of the parties agreeing to have the action dealt with in that way or where there was, as in Corroon, factors and circumstances which were exceptional. That such a jurisdiction exists to intervene in exceptional circumstances was also recognised by Cross J. in Russell v. Health Service Executive where he held that exceptional and what he described as almost unimaginable factors would have to ensue to prevent a plaintiff, who is well advised by solicitor and counsel, to have his case determined in accordance with the law.

 

61. The plaintiff says that the factors and circumstances outlined in this case fall far short of what would be required to warrant the court intervening and making the orders now sought by the defendant against the express wishes of the plaintiffs parents.

 

62. The defendant’s proposal is not without its attractions. Acknowledging, as I do, that the court has not heard any evidence as such other than the views of the mother and next friend in relation to the matter now before the court, it is apparent from the opening and from counsel’s submissions that such uncertainties as are recognised in relation to the plaintiff’s cognitive status would, it appears, become more clearly ascertainable by the time she attains her majority. Similarly, her academic achievements, vocational opportunities, future care, accommodation, aids and appliances requirements are likely to be more easily assessed and as counsel for the defendant submitted, more properly determined for the remainder of her life at a point in time at or shortly after the plaintiff attains her majority.

 

63. The plaintiff’s mother and next friend gave evidence in relation to the plaintiff’s disability and the basis upon which she had made the decision to proceed to have the damages assessed by the court on a once and for all basis.

 

64. She very fairly accepted, I thought, that at eighteen years of age or thereabouts the plaintiff, notwithstanding that there was some uncertainty in relation to her future cognitive capacity ,might be able to make decisions for herself and that she may very well be able enough to go on to third level education. In the course of cross examination she made it clear that she was motivated not by the disruption which future assessments would cause herself and other members of the family but the effect that that was likely to have on the plaintiff. She fully appreciated that if it transpired that the plaintiff was able to make decisions for herself ,including how she should proceed with the litigation in the event that the court were to make the order now sought by the defendant ,that the effect of her decision would be to deprive the plaintiff of that opportunity. As a mother she would hate to think that by her decision she would have deprived her daughter in some way but then she also had to deal with the situation that at eighteen or nineteen her daughter might still need advice and even protection of the court if it transpired that she failed to retain the same level of cognition as she now appears to possess. She accepted that there was uncertainty about that aspect of matters.

 

65. Additionally, evidence was given that she had carefully considered the advice which she had received from all of the experts legal and otherwise as had been retained. She wanted her daughter to be able to get on with her life and to enjoy it as best she could. However, as far as she was concerned she did not think, for example, how significant problems which may well arise in middle life are going to change anymore in ten years time than at present. Whether or not damages are assessed at this time or in ten years time the plaintiff’s future in middle age and later would essentially, she had been advised, be no different.

 

66. I had the opportunity to observe the demeanour of the next friend as she gave her evidence and it was quite clear to me that she was very conscious of the potential risks in having the plaintiff’s claim proceed at this time, including the risk that her daughter, the plaintiff, might in the result be under compensated, perhaps to a significant degree. In that regard she was quite clear that even if it transpired in due course that the plaintiff was under compensated the fact would remain that if the action proceeds to full and final judgment now it would be decided on the basis of the best evidence that it is possible to bring before the court.

 

67. Although another parent might make a different decision on the basis of the information presently available such as would, by way of example, minimise the risk of under compensation and/or afford the plaintiff an opportunity to make decisions for herself on attaining her majority, the decision which has been taken by the next friend is, in my view, and on what I know of the case as it has been opened to the court, one which has been made rationally and upon considered legal advise.

 

68. Moreover, I have not the slightest doubt nor do I hesitate for one moment in saying that in my view the plaintiff’s mother and next friend is acting in what she believes is absolutely in the best interests of her child.

 

69. Nothing in the evidence of the next friend nor about the circumstances as they have been outlined could properly found a conclusion by the court other than that the Plaintiff is motivated solely by doing what she believes to be right in the best interests of her child when deciding as to how she wishes this case to proceed and in particular there are not in my view any exceptional circumstances or factors present as would make it permissible for the court on foot of its inherent jurisdiction to intervene against the express wishes of the plaintiff’s mother and next friend made in the exercise of the constitutional right which she enjoys as part of the family unit guaranteed and recognised under the Constitution.

 

70. Whilst it is the view of the court that the ability to make proper provision for those unfortunate enough to suffer catastrophic injuries in appropriate cases by way of structured settlements or periodic payments of damages is desirable ,even on the ground alone of minimising the risk of under compensation to the victim of an actionable wrong, and as has been provided for in the legal framework established in other jurisdictions, including Northern Ireland, it is not ,in absence of agreement between the parties, permissible for the court, otherwise than in the most exceptional of circumstances ,to proceed thus rather ,and having due regard to the separation of powers, that is a properly a matter for the legislature. Order 36 rule 34 was not intended to provide nor should it be construed in such away that it becomes a vehicle to carry into effect periodic payment orders as a means of assessing damages in the absence of and as a substitute for a statutory framework established for that purpose.

 

71. This case and others like it illustrate, if illustration is required, the urgent necessity of bringing forward long promised legislation to amend the law in this area by providing for structured settlements and the making of periodic payment orders in such cases.

 

72. In the absence of a statutory framework to provide for structured settlements and/or the making of periodic payment orders; there being no agreement between the parties here as to how best to proceed, and absent any exceptional circumstances or factors which would warrant the court in the exercise of its inherent jurisdiction intervening in the best interests of the plaintiff otherwise than in accordance with the expressed wishes of the plaintiff’s mother and next friend, the court will refuse the application. I will discuss with counsel the final form of the orders to be made having due regard to the judgment of the court on this matter